Ban on upward-only review; a damage limitation suggestion
19 May 2026(2026-May: Linked) Lawyers like certainty. Don’t we all? Certainly enables us to rely on it. For example, the weather forecast. This is not a certainty, it is a forecast yet many people rely on this scientific prediction as if it is certain it will rain tomorrow even when tomorrow arrives it is dry. My theory of the weather is that it listens to the weather forecast and decides that the best time to not do as it is told is during a bank holiday weekend. I am fond of telling friends that i have an arrangement with the weather. The arrangement is that sometimes the weather can let me down as, for example, happened a long time ago when with a friend we set off to walk the 7 miles around London’s Richmond Park, she with umbrella, me unprepared for an afternoon of rain.
Lawyers like certainty for its objectivity, so it is fascinating how many disputes at rent review involve a different interpretation. For example, In the wording of a permitted user, the innocuous ‘and’ – whether conjunctive or disjunctive?
Currently, I am reading about valuation yardsticks. For those unfamiliar with the terminology, a yardstick provides certainty where none would or might otherwise exist. For example, the permitted use is a dental surgery, the valuation basis is offices. The fact if it is that the premises used as a dental surgery do not have and might never get planning permission for offices is irrelevant. The parties, most likely the landlord, wanted the premises to be valued as if offices. Sometimes the intention in being too specific goes awry as in Dukeminster (Ebbgate House One) Ltd v Somerfield Properties Co Ltd 1997.
For a landlord, hinging a rent review onto something other than the vagaries of the open market – in which the rent of the premises in question rely on the certainty at the review/valuation date of another landlord having obtained a higher rent for comparable premises – makes sense. During the 1970s, the institutional investor invention of the upward-only rent review recognised the downside of allowing the open market to be an arbiter. So now that it’s only a matter of time before upward-only review is banned, and forward-thinking has for the most part put a lid on index-linking, a solution, it seems to me, is to hinge a review to two figures: (1) a fixed increase at say 25% of the initial rent and (2) a fixed decrease at say 10% of the initial rent. With the initial rent known in advance, the tenant would know the maximum and minimum rents applicable at the review date and be able to negotiate between the known extremes.
Return to Article